Australia has no significant indigenous workforce, meaning private contractors like Poseidon Offshore will have to build and maintain its newest and most advanced submarines in order to cut power costs.
The two Pacific Fleet subs are expected to cost more than $20 billion. A senior Australian official said last week, “the government doesn’t want to just buy anything.”
Poseidon plans to construct the subs in Australia with its own employees, and start employing some workers in South Australia immediately. Eventually, they will be offshore.
The South Australian government has promised to buy at least 400 construction workers to ship out to the USS Independence.
The decision to purchase the U.S. Freedom class of submarines is widely seen as a continuation of the Australian and U.S. security relationship, already strong under outgoing Prime Minister Malcolm Turnbull.
The former Australian prime minister, Tony Abbott, lauded the plan, saying the nation will have to reform its Navy’s shipbuilding program to keep the submarines in working order, and will eventually need to build a fleet of 30 vessels to supply the Asia-Pacific region.
Still, former PM Abbott raised concerns about the new submarines. “We have a serious problem we’re going to have to confront in terms of our submarine fleet,” he said. “It has at least twice the expenditure in the building of each one.”
For the first time, the cost of Australian submarines is coming under closer scrutiny than usual because of the naval partnership. The costs are seen as an early test of the ability of the two countries to share details on procurement in the wake of Trump’s increasing criticism of defense alliances.
The contract for Poseidon was signed after Trump’s visit to Australia last November, when the president and Turnbull discussed defense cooperation.
Back in the U.S., contractor Huntington Ingalls is expected to face sharp criticism from Congress, which is focused on jobs.
Huntington Ingalls CEO Mike Petters said in a letter to workers this month that the contract to build the F-35 should create enough work that “we will be able to continue to support our workforce and keep existing naval shipbuilding programs in full and reliable production.”
But his future at the helm of his company is no longer guaranteed.
Last month, the House Armed Services Committee chairman, Rep. Mac Thornberry, R-Texas, said he might use the looming fiscal year 2023 Defense Authorization Bill to weaken Naval Sea Systems Command, which manages construction of warships.
Feinstein Has Questions About Navy Subs
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